You're viewing Docket Item 120 from the case Archie Comic Publications, Inc. v. Penders. View the full docket and case details.

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maintained a continuous licensing relationship with Sega. SOF ¶ 6-7. However, in 2010, when

Penders began filing for registration of his purported rights in the Works, and asserting infringement

claims against ACP, Sega allowed the license to expire on December 31, 2010, in order to negotiate a

new agreement with ACP. SOF ¶ 7. This protracted negotiation lasted until October 2011, when

ACP and Sega finally executed a new license agreement. SOF ¶ 7. This new license agreement

requires ACP to pay substantial up-front licensing fees, and ACP no longer has a right of first refusal.

SOF ¶ 8-9. ACP’s license with Sega is now non-exclusive. This is seriously damaging to ACP.

From 1993 until 2005, Penders worked for ACP as an independent contractor, and developed

stories, scripts, artwork, and other original creative expressions fixed in tangible form (individually a

“Work” and collectively “Works”) as contributions to the Sega Comic Book Series. SOF ¶ 17. The

relationship between Penders and ACP was memorialized in written agreements, executed in 1996.

SOF ¶ 28. Penders executed two agreements with ACP: Revised Newsstand Comic Independent

Contractor’s Agreement (“Contractor’s Agreement”); and ACP Licensed Comic Books Independent

Contractor’s Agreement (“Licensed Comic Books IC Agreement”) (the Contractor’s Agreement and

the Licensed Comic Books IC Agreement collectively referred to as the “ACP-Penders’

Agreements”). SOF Ex. B of Ex. 4; SOF Ex. C of Ex. 4.

Each of the ACP-Penders Agreements provide that New York and United States law will

govern, and that the “parties consent to the exclusive jurisdiction and venue of any State or Federal

court of competent jurisdiction in Manhattan, New York with respect to any proceedings arising

under or relating to this Agreement.” SOF, Ex. 4, Ex. B, ¶ 27 and Ex. C, ¶ 11.

Paragraph 1 of the Contractor’s Agreement (SOF, Ex. 4, Ex. B) defines “Properties” as all of

ACP’s comic strips and comic books that include characters, artwork, stories and other creative

expressions that are used in any of ACP’s publications or licensed products:

SOF Ex. B of Ex. 4 at ¶ 1.

Paragraph 2 of the Contractor’s Agreement (SOF, Ex. 4, Ex. B) defines “Works” as “[a]ll

past, pending, and future uses of all Properties,” which includes all characters, artwork, stories, plots,

trademarks, logos, and other creative expressions. Notably, paragraph 4 of the Contractor’s

Agreement clearly identifies that Properties also includes those produced by ACP for third party



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sufficient consideration to support a contractual bargain—i.e., it is well settled that an exchange

of promises is sufficient to satisfy the legal requirement of consideration.” (citations omitted)).

In Marvel, a case recently decided by this Court, a similar agreement was also held valid and

enforceable and the court found that all works submitted to marvel by the artist prior to and after

execution of the work for hire agreement in that case was supported by valid consideration in the

form of marvel’s promise of future work for the artist. In that case, no work was ever even actually

performed, and the court nonetheless found that the contract was valid, legally enforceable and that

all works submitted by the artist to Marvel were subject to the agreement. Id. Here, by contrast, not

only was Penders promised payment for the Works he submitted and which were approved by ACP,

he was in paid for those Works, and ACP also promised and delivered future work to Penders. SOF

¶ 19. There should be no question that ACP provided valid consideration to Penders under the ACP-

Penders Agreements for the conveyance of all Works he submitted (whether before or after execution

of the agreements in 1996) and which were approved by ACP, in two forms: 1) payment from ACP;

and 2) the promise of future work.

As for the third element, Penders breached the ACP-Penders Agreements by claiming

ownership of the Works, registering copyright in the Works, and otherwise taking actions

inconsistent with, limiting or challenging ACP’s exclusive rights in the Works. SOF ¶ 44. In

addition, Penders has now publicly announced his intention to use the Works for his own personal

benefit despite the agreements which state that Penders will not “(a) use any of the Properties or

reproduce any of the Works, (b) prepare works that are substantially similar to any of the Properties

or Works or (c) prepare works that parody the Properties or Works.” SOF Ex. B of Ex. 4; Ex. C of

Ex. 4. Each of these actions constitutes a breach of the ACP-Penders Agreements.

Lastly, ACP has been damaged as a direct and proximate result of Penders’ breaches of the

ACP-Penders Agreements. ACP no longer enjoys a right of first refusal to the properties, it had to

pay substantial up-front license fees in 2011 to gain renewal, and Penders’ copyright registrations

and public statements regarding ownership and future exploitation of the Works has cast doubt on

ACP’s rights and harmed its relationship with Sega. SOF Ex. 1 ¶ 19; Ex. A of Ex. 1; Ex. B of Ex. 1.

4. The Court should grant summary judgment in favor of ACP on each of

Penders' counterclaims.

Lastly, the Court should then also enter judgment in favor of ACP on Penders’ counterclaims

for declaratory relief and copyright infringement. If the Court finds the ACP-Penders Agreements

valid and enforceable, Penders’ counterclaims for declaratory judgment and copyright infringement

cannot survive summary judgment in favor of ACP.

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